By G Chokkalingam
Founder, Equinomics Research & Advisory
I have 200 shares of Avanti Seeds that I bought at Rs 687. Will it bounce back or should I book this huge loss? —VISHAL KHANDELWAL
You may hold the stock only if you are a long-term investor as its exports are expected to be impacted adversely in the short term due to fast spread of Covid-19. By FY2022, its earnings could bounce back to around Rs 30 per share, and hence, the stock could recover to around Rs 400 in the next 12 to 18 months.
I am holding 7,500 shares of Nalco at Rs 46.50 and 8,000 shares of NBCC at Rs 37. Please advise whether to hold or sell. —SC AGARWAL
You may hold both Nalco and NBCC for the long term. Considering the strong balance sheet with significant cash and opportunity for the metal space to come out of deflationary conditions within a year or so, it is worth not booking loss in Nalco at this juncture. Similarly, NBCC could also possibly come out of current gloomy short-term outlook for the construction sector within a year or two. Considering its strong balance sheet and discount to adjusted book value, you may hold NBCC for one to two years.
I own 3,500 shares of Jindal Steel & Power. Should I hold or sell? —NAFISA NASRULLA
Steel is one of the badly affected sectors due to global deflationary pressures caused by the wide spread of Covid-19. If you hesitate to book losses, you may hold it for another two years to recover your losses or to make some profit.
I am holding 100 shares of Gayatri Projects purchased at Rs 170 apiece. What should I do? —ANJALI SHARMA
Having lost 95% of your capital, you may hold it on tactical reason for the long term. However, in the short term, there could be more pain from the stock as it is going to be difficult for most of the highly leveraged and also highly pledged (promoters’ shares) companies like this one, which are engaged in the infrastructure businesses to survive and succeed from the current deflationary conditions.
I had bought Adani Power at Rs 63 and Apollo Tyres at Rs 68. What should I do? —JAYESH SETH
Power would be one of the few sectors to continue to operate despite lockdowns and major disruptions in the economic activities. Hence, you may hold Adani Power with a medium to long term target price of around Rs 40. You may hold Apollo for nearly two years with a target price of around Rs 120 as it can come back to its normal earnings of over Rs 10 per share possibly in FY2022.
I had bought 250 shares of Himadri Special Chemicals at Rs 65.80.Should I hold or not? —GOVINDARAJ V
Chemicals businesses of Himadri can come back to normal linear growth possibly and also post an EPS of around Rs 10 in FY2022. You could hold for two years with target of Rs 100.
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